Officials from 1 January 2017 put in place a special compensation Fund. How this decision will affect the segment of primary residence? The experts have two views of the situation.
All will be well
At the end of August 2016, the press service of the Rating Agency building complex (RASK) alerted the public that the audit of more than 4 thousand construction companies in the stage of bankruptcy is the 61 organization. Thus, over the past 12 months the number of distressed developers in Russia increased almost three times. In quantitative terms, the number of projects under construction, risks becoming a perpetual long-term construction, has increased by 385 units (almost 60 thousand apartments).
As practice shows (and confirms, in particular, analysts of the Association of developers of the Moscow region), has not yet abolished the system of compulsory insurance of developers under current conditions actually proved to be unsustainable. To replace it called the state compensation Fund, which should be the equivalent of the Agency for Deposit insurance in the banking sector.
The amendment on the creation of Russian President Vladimir Putin signed in early July. And on 11 October the Minister of construction and housing Mikhail Men said that the development of normative-legal base, regulating the work of the Fund, will be completed in the next two weeks. It only remains to determine the form in which it will operate, as a public legal company or as a division of the joint Institute for the development based on the Agency for housing mortgage lending (AHML).
While officials decide this burning question, we asked the President of the Guild of lawyers real estate market and the Chairman of inter-regional arbitration court of Moscow and Moscow region Oleg Sukhov: what good will this Fund to real estate investors?
— As stated in paragraph 1 of article 23.2 of the Law № 214-FZ — said the lawyer — the Fund is aimed at additional protection of shareholders, which will not be fulfilled obligations by construction companies. How this will be supported must be defined in the Government Decree, which is currently pending.
“SP”: — how Much it will complicate the work of developers and how will it affect the value of the objects?
— All in the same article 23.2 (paragraph 3) of Law No. 214-FZ has a maximum size of contributions of developers to Fund. It may not exceed 1% of the cost of construction. In absolute numbers, of course, the amount will be huge, but not so significant to have a global impact on developers or change the prices per square meter.
“SP”: — How the Fund will in principle be effective? What is the probability that it does not turn into another piggy Bank for funds misuse?
— The first thing that occurred to me — another pocket for theft of officials. However, if you do not think about the bad and only right, you should recognize that this Fund is very necessary abandoned, frozen objects, which are currently dozens, and perhaps hundreds scattered across the country. And certainly he needed the strikers to defrauded investors, which in Russia today tens of thousands. But whether conceived Foundation and its funds indeed perform its function, and if so, how successfully, only time will tell.
“SP”: — What are the limitations on use of funds this Fund will act, is it easy to get around them?
— The terms of the Fund’s resources and possible limitations should be taken by the Government of the Russian Federation in the form of a relevant Decision or Provision, which has so far not been published. The regulatory document is to be prepared before the end of 2016, so he can begin to act from 1 January 2017. Will the Government within a specified time, hard to say. I think that it should.
It will be bad
It should be noted that the opinion of Oleg Sukhov on the impact created a compensation Fund in the primary market of real estate is not shared by all experts and developers.
In particular, they wonder what will happen to insurance companies? If they are liquidated, then how will we spend the funds raised?
But this is one option. And the other insurers in the market will remain and continue its activities. This, incidentally, is quite a likely scenario, because in the end of summer compensation Fund prescribed in the amendments to the law on real estate investors as an additional mechanism to protect their rights to the existing ones. Then developers will have to pay in both sides, that would be too expensive, given the sample, which was announced in an interview with the media representative of the company “Khimki Groups” Dmitry Kurowski.
He calculated that during the construction of the project with a total area of 50 thousand square meters at a cost of one meter in 59 thousand rubles payment of the developer in the compensation Fund will be about 30 million rubles. If you add here also the contributions to the insurers, at least at the level of 1.5%, a very round sum. In this case, not only developers middling (small would not survive), but the big developers (and the trend to consolidation already evident in the Association of groups of companies “Morton” and the PEAK) will not remain other exit, except how to work out the costs using the consumer’s pocket by raising the starting prices.
And range of this growth, according to the General Director of one of the Kuban construction companies Andrew Sigidin, which leads portal Ugahi will be very visible: about 15-25%.
Additional factor of increase in prices in the regions will be a shortage of housing due to withdrawal from the market of small construction companies. The only exception will be there only Metropolitan region that the property is saturated (see “SP” “Moscow will repeat the fate of Detroit?”), but here, the developers can hardly escape the temptation to rewrite the price tags in their favor.
Well, the forecast does not look so fantastic. Especially against the backdrop of the impact of the implementation on the primary housing market of the indemnification Fund the member of the Federation Council Anton Belyakov.
He stated: given the fact that each self-regulatory organization already has its own compensation Fund seems to be designed to solve real estate investors (but somehow stubbornly don’t spend), a new Fund, in fact, merely an additional feeder, an additional tax disguised from the real estate market (and still do not know in whose pocket — ed.).
And in this statement it is possible to discern a healthy rational. Especially when you consider one small thing: despite the fact that in the bill the contribution to the compensation Fund is limited to just one per cent, Deputy Minister of construction and housing and communal services Oleg Betin in early October, has estimated that this money will not be enough for the completion of problematic objects.
What are the implications of this statement will be made, it is difficult to assume. But the analogy with the statement of another representative of the Ministry of construction, Andrei Lapwing, the probability of increasing monthly payments for the repair 10 times, are asking themselves.
